Wednesday federal headlines – May 15, 2013

The Morning Federal Newscast is a daily compilation of the stories you hear Federal Drive hosts Tom Temin and Emily Kopp discuss throughout the show each day. The Newscast is designed to give FederalNewsRadio.com users more information about the stories you hear on the air.

If you don’t think decisions by headquarters affect the folks out there, consider this. Veterans Affairs will shut down an outpatient clinic in Malone, a small town in New York’s Franklin County. That’s way up-state. According to the local Press-Republican, that will send 700 veterans schlepping to find another health care location further away. Bonnie Stewart, deputy director of the county Veterans Services Agency, called the decision heartbreaking. Local officials were told the clinic’s enrollment fell below the threshold of 700 to keep it open — 699 to be exact. An Albany regional VA supervisor says the veterans population of New York State has declined 18 percent. (Press Republican)

It could be a brutal day for the Attorney General. Eric Holder testifies before the Republican-led House Judiciary Committee this afternoon. Lawmakers will grill him on the government’s handling of intelligence before the Boston Marathon bombings and revelations that the Justice Department tracked phone calls that Associated Press journalists made. Holder says that move was part of an effort to find the source of a leak about CIA counter-terrorism operations in Yemen. A coalition of media organizations has written to Holder asking for a fuller explanation and suggesting stronger legal protections might be needed. (Federal News Radio)

Federal agencies have succeeded in cutting the number of data centers they operate. But it’s unclear whether they’ve saved much money. That’s the gist of a new report from the Government Accountability Office. It looked at the Federal Data Center Consolidation Initiative. GAO says agencies will manage to shutter nearly 1,000 data centers by 2015. That’s short of the goal, but not bad. The Office of Management and Budget says the initiative will save $3 billion. But auditors say OMB isn’t tracking the savings to know for sure. Federal CIO Steven VanRoekel agreed with most of GAO’s findings. He promises to initiate closer tracking of data center spending. (GAO)

Russia has kicked a U.S. diplomat out of the country for spying. Russian security forces say they caught Ryan Fogle, an entry-level worker at the U.S. Embassy, disguised in a blond wig and trying to recruit a counterintelligence officer. U.S. Ambassador Michael McFaul would not speak with reporters yesterday after his meeting with the Foreign Ministry. The State Department has confirmed that Fogle worked at the embassy but has not given any details. The CIA is not commenting. Moscow officials say they briefly detained Fogle before handing him to the U.S. Embassy. They have declared him persona non grata and told him to leave immediately. (Federal News Radio)

Federal deficits will drop to $642 billion this year. A new estimate from the Congressional Budget Office is much lower than one it issued a few months ago. CBO cites higher tax revenues and payments from Fannie Mae and Freddie Mac. Last year’s deficit topped a $1 trillion. The falling deficit means less pressure on Congress and the White House for a so-called grand bargain on taxes and spending. Sen. John McCain (R-Ariz.) says Congress is unlikely to reach a deal on the 2014 budget before the end of the year. That would mean another continuing resolution. CBO forecasts deficits to keep falling for the rest of the decade, before shooting up again. (Federal News Radio)

Attorney General Eric Holder says the Justice Department is investigating the IRS for targeting conservative for extra scrutiny when they applied for tax exempt status. Holder says he doesn’t know yet whether IRS employees acted criminally. He joins three committees in Congress in probing what happened. Holder’s announcement came just as the Treasury Inspector for Tax Administration released a report on its own investigation. TIGTA found lax oversight of IRS employees in Cincinnati by supervisors in Washington. The reports doesn’t say if the targeting originated at headquarters. (Federal News Radio)